Colleges Cutting Student Grants, Scholarships

The move—prompted in part by the colleges' own financial troubles—is prompting students and their families to borrow more to close the gap, raising the already-heavy debt load many graduates will face.

On average, U.S. undergraduates received $6,077 in grants and scholarships in the 2011-2012 academic year, down from $7,124 a year earlier, according to the study, which polled 1,601 undergraduates and their parents.

While college aid typically accounts for a big chunk of grants and scholarships, the category also includes scholarships from outside organizations and federal funding, such as Pell Grants.

ENLARGE

Some colleges are raising the bar to qualify for need- and merit-based scholarships, says Justin Draeger, president of the National Association of Student Financial Aid Administrators.

Meanwhile, college costs have continued to rise at rates faster than inflation, according to College Board figures.

As a result, some students and their families are taking on more debt or are opting for lower-priced public schools or two-year institutions.

The average amount borrowed by families—a calculation that includes parents and students who didn't borrow at all—rose nearly 17% last year to $5,551. That was up from $4,753 in the 2010-2011 academic year.

Meanwhile, the percentage of families with college students taking out federal student loans grew to 34%, up from 25% in 2008-2009, according to the report, conducted by the research group Ipsos.

Conservative governors, joining their Democratic counterparts, have been making deals with online retail giant Amazon.com to collect state sales taxes. The movement picked up an important ally when New Jersey Gov. Chris Christie—widely mentioned as a potential vice-presidential candidate—recently reached an agreement under which Amazon would collect sales taxes on his state's online purchases in exchange for locating distribution facilities there.

The move toward taxing online sales has broad implications. Online shopping will become more expensive for consumers. Brick-and-mortar retailers won't have the price disadvantage they now have compared with online sellers. Strapped states suddenly could be flush with $23 billion in new annual revenue, according to the National Conference of State Legislatures.

Amazon, eBay, Overstock.com and other online sellers have relied on a 1992 Supreme Court ruling that companies selling online didn't have to collect sales taxes if they lack a physical presence in the state where the customer lived. The ruling, however, left open the possibility that Congress could step in. Since then, online shopping has gone from fledgling to more than $200 billion a year.

In addition to expected support for the bill from big-box and Main Street retailers, even Amazon now backs a national solution, as long as it would cover online rivals. Amazon plans to offer same-day delivery in some areas, analysts and competitors say, which will require it to have more warehouses—and thus open itself up to more state sales taxes. Most of its online competitors oppose the bill.

—Monica Langley, The Wall Street Journal

Back-to-School Sales Early

While back-to-school sales typically kick off in August, this year they started in June with deals on computers from stores like Best Buy and Staples, as well as manufacturers including Apple and Dell.

Now other retailers are on the bandwagon, pushing purchases of backpacks, notebooks, clothes and other classroom essentials. Kmart's new "back to campus" deals offer 30% off juniors' clothing and 20% on small appliances. Staples, which introduced a 15%-off "back to school savings pass" in mid-June, has offers in its latest ad for one-cent notepads and binders and 25-cent pens.

Experts say some early back-to-school offers should be avoided. Many of the new fall clothing items in circulars are still full price, and experts say shoppers in the market for a laptop can expect cheaper deals in September.

Clothing. Focus your early buys on summer clearance items that will last into fall, rather than stores' new fall and winter items, says Michelle Madhok, the founder of sale-tracking site SheFinds.com. Dresses, shorts and lightweight sweaters are good buys.

Electronics. If you're buying for a college-ID-carrying student, manufacturers have already debuted their fall discount promotions, which tend to be the best discounts available. But otherwise, it's worth waiting until September for better pricing, says Michael Paulson, a vice president for gadget price-tracker Decide.com.

Office Supplies. Current sales can offer a good excuse to stock up on basic supplies like printer paper and pens for kids' and parents' needs alike.

The only reason to wait: if your child's school has yet to release a list of needed supplies. Waiting for that ensures you won't buy too much or the wrong things, and the sales are likely to be good through the rest of the summer, says Kit Yarrow, a professor of psychology and marketing at Golden Gate University.

Plus, there are often state sales-tax holidays later in the summer that can sweeten the deal for items that aren't currently on sale.

—Kelli B. Grant, SmartMoney.com

— The Aggregator, edited by Emily Glazer, features news and commentary from The Wall Street Journal and other publications. Email: emily.glazer@wsj.com

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